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Control FC Formulas

Formulas to control Food Costs

What is the formula for figuring Cost of Food Sold? (Opening Inventory + Purchases = Total Food Available) - Closing Inventory = Cost of Food Sold
How does one calculate Food Cost Percentage? Food Cost ÷ Sales = Food Cost Percentage
What are the three methods for figuring the selling price of an item? 1. Texas Restaurant Association (TRA) Markup method 2. The Factor Method 3. Markup on Cost Method
What is the advantage of using the TRA Markup Method? Can be modified to meet changing circumstances becasue it takes into account sales, costs, and profit.
What is the formula for figuring the EP amount needed? EP amount needed ÷ Yield percentage = AP amount
How is Inventory Turnover figured? 2 Step process: Step 1 Find Average inventory: Opening Inventory + Closing Inventory ÷ 2 = Average Inventory
How is Inventory Turnover figured? 2 Step process: Step 2 Cost of food sold ÷ Average Inventory = Inventory Turnover rate
What corrective action might be taken to REDUCE FOOD COST? 1. Reduce portion size 2. Replace food item with a more cost-effective ingredient. 3. Feature items with higher profit margins. 4. Raise menu prices
What corrective action might be taken to control FOOD WASTE? 1. Monitor portion control 2. Monitor food storage and rotation 3. Monitor food ordering 4. Imporve communication to reduce production errors
What corrective action might be taken to control INVENTORY COST? Order appropriate quantities--Avoid having too much or too little in storage.
What corrective action might be taken to reduce LABOR COST? 1. Reduce number of employees on schedule 2. Ask employees to end their shifts early. 3. Schedule cross-trained staff.
COST CONTROLS are needed in every state of operations. True or False? True
Name 6 areas of the operation that must have cost contols? 1. Menu 2. Purchasing 3. Receiving 4. Storage 5. Production 6. Service
What are the two largest costs in a restaurant that management must control? Cost of Food. Cost of Labor.
What is the best way to tell at a glance how an operation is performing? Reading the Income Statement
Opening Inventory is the same number as the Closing Inventory for the previous period. True or False? True
A Standardized Recipe is a key tool in the process of controlling food costs. True or False? True
How to figure Yield Percentage? EP Weight ÷ AP Weight = Yield %
How to determine how much to purchase to produce a given number of servings? EP needed ÷ Yield % = AP needed
Explain how the TRA method of Markup is calculated. Using percentages, add labor expenses, all other expenses except food cost, and profit; subtract total from 1.00 = divisor. Divide portion cost of item by divisor to reach selling price.
Created by: kalimu12